Designated to become a Center of Excellence
Designated to become a Center of Excellence
Apart from Indonesia-Kuwait mutual sociopolitical principals,
the oil sector has been the main propellant in their economic
relations in recent years.
And one of the most notable investments that Kuwait launched
here in Indonesia was in 1995 through the mega project of PT
Hemoco Selayar International Oil Refinery in the 100-kilometer-
long Selayar Island, located in the southern tip of South Sulawe
si.
The $4 billion project, 60 percent owned by Hemoco Kuwait
General Trading & Contracting Company with the remaining 40
percent by its Indonesian partner PT Kilang Minyak Bumi Selayar,
is a massive oil refinery complex consisting of an oil refinery,
petrochemical plant, marine terminal, and an industrial and
residential area.
The island, currently inhabited by some 100,000 people, is
chosen for its strategic location both for import of crude as
well as export of products to Asia. The deep water access adja
cent to the refinery site guarantees efficiemcy in transporta
tion, and the plant lies at the gateway to the eastern part of
Indonesia.
After years of a thorough strategic and integrated develop
ment planning and with strong supports from related state insti
tutions of both governments and the provincial authorities, the
initial construction stage of this strategically vital refinery
will be started, insya Allah (if God willing), soon this year, or
2003 at the latest.
At this time, Hemoco is at the final preparation stages for
the construction of the jumbo oil refinery complex. Giant bidders
from The Netherlands, Germany and the States are currently par
ticipating in the beauty contest for the main EPC (...) contrac
tor of the project.
The early development phases of the refinery will help
enhance the economy and quality of life of the locals. The con
truction of the plant and all necessary supporting infrastruc
tures, such as roads, harbors, and medical, education and train
ing facilities, will maximize the employment of Selayar inhabi
tants which later could encourage other industries to develop.
And once the project is completed, the Hemoco refinery will
provide significant contribution to the Indonesian economy as it
will create 2,500 job opportunities and be the locomotive engine
for the development of the area and also bring multiplier effects
to the Indonesian national development. The project is also
expected to boost Indonesia's foreign exchange earnings of at
least $400 million per year from import substitution and exports.
The commitment of Hemoco joint venture to develop the multi-
billion project was not affected by the economic turmoil, which
now enters its fifth year. But there are several things that
bring serious headaches to the company, namely the implementation
of the newly-approved oil and gas deregulation particularly on
the retail market policy.
Just like other projects that heavily depend of foreign
investors, Hemoco also hopes for a social and political stability
and several incentives like tax holiday.
From the beginning in developig the project concept, Hemoco
has designed an environmentally friendly state-of-the-art facili
ty which incorporates the latest technology. The project will
adopt the world's best practice in its environmental impact
assessment, project planning and protection of the unique marine
ecological environment in the surrounding areas, particularly the
world-renowned Taka Bonerate water.
An initial oceanic study analyst indicate the project will
not pollute the famous Taka Bonerate water, which is located
about 120 kilometers from the refinery site.
One of Hemoco's subsidiary, Selayar International Develop
ment Company, for instance, will help develop tourism in the
southern part of the Selayar Island.
In essence, Hemoco does not want to develop Selayar Island
to simply become the exclusive site for their business project
but a center of excellence for the oil and downstream petrochem
cial industry in Indonesia.